Deutsche Hospitality parent marks record quarter for signings

Imagery of IntercityHotel Rotterdam-Schiedam © Necron Group AG.
H World Group, the Chinese parent company of Deutsche Hospitality, revealed that Q2 2023 was record-breaking for hotel signings.

During the quarter, the firm secured deals for 1,054 properties globally, representing an 88% increase on the 561 agreements for the same period in 2022.

Positive pipeline

As of 30 June, H World had a total of 2,845 unopened hotels in the pipeline, including 2,808 hotels from its legacy-Huazhu business and 37 hotels from the legacy-Deutsche Hospitality business. This signifies a 28% increase in 12 months from the 2,199-site pipeline at the end of Q2 2022.

Legacy-Huazhu’s upcoming developments include 15 leased and owned hotels, and 2,793 manachised and franchised properties, while legacy-Deutsche Hospitality’s total comprises 26 leased hotels and 11 manachised and franchised sites.

Segment and geographical focuses

Economy and midscale segments are proving to be the group’s core products to serve the mass market. 38% of the pipeline is for economy brands, 48% for midscale and 14% for upper midscale and above.

However, the company wants to further develop the upper midscale segment, with the number of pipeline sites within this classification increasing by 29% over the last 12 months, from 245 to 317. For this push, the group will utilise brands including Deutsche Hospitality’s Intercity Hotel and Maxx by Steigenberger.

In terms of geography, H World is focusing on pushing its presence in lower tier cities, particularly in China. 55% of the pipeline is for tier three or four cities or below, as against 36% in tier two conurbations and 9% in tier one municipalities.

Next gen project

One notable signing during the quarter was for IntercityHotel Rotterdam-Schiedam in The Netherlands. Deutsche Hospitality inked the agreement with a joint venture between Dutch project development company De Veste Schiedam B.V. and Necron GmbH. The hotel is expected to open by the end of 2025 with a capacity of 283 rooms, including more than 20 long-stay units.

The 18-storey newbuilding will be the first IntercityHotel representing the brand’s Next Gen concept. It is aimed at travellers who are always “on the move” and appreciate good connections as they explore the city or head to their next business appointment. The centrepiece of the new concept is City Square, an openly designed lobby suitable for meetings, working, eating and just experiencing. 

Current network

As at the end of Q2 2023, H World’s worldwide hotel network in operation totalled 8,750 hotels and 844,417 rooms, including 128 hotels from Deutsche Hospitality.

During the second quarter of 2023, the legacy-Huazhu business opened 374 hotels, including two leased and owned hotels, and 372 manachised and franchised hotels, plus it closed a total of 216 hotels, including six leased and owned hotels and 210 manachised and franchised hotels.

Franchisee confidence

Jin Hui, CEO of H World commented: “We are pleased to deliver another quarter of strong results, as the growth of travel demand further strengthened in the second quarter.

“Continued increases in our franchisees’ confidence level led us to enjoy a historical high signing of over 1,000 new hotels during the quarter.”